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Mortgage rates in Tennessee
Mortgage rates that come in a hair under the national average.
Mortgage rates during the coronavirus
As mortgage rates fall to record lows in the wake of COVID-19, our partners are seeing an increase in demand for loans and refinancing. As they work through this influx of applications, you may see rates that are higher than expected — or no rates at all. We recommend comparing offers from multiple lenders to ensure you're getting the best deal possible.
Mortgage rates in the Volunteer State average 4.675% for 30-year loans. And interest rates are expected to hold steady at under 4% in the coming year.
What's in this guide?
How much do Tennessee rates vary?
Average mortgage rates in Tennessee spanned 3.981% to 4.795% in 2018. Factors like the type and length of your loan can sway your interest rate. For example, conventional loans generally have higher interest rates, but fewer property and borrower requirements than government-insured mortgages.
2018 average rates in Tennessee by loan type
| Loan type | 15-year average rate | 30-year average rate |
|---|---|---|
| Conventional | 4.372% | 4.795% |
| FHA | 4.175% | 4.698% |
| VA | 3.981% | 4.552% |
| USDA | Not available | 4.654% |
Rates based on data from ffiec.cfpb.gov.
To get an idea of the difference that a fraction of a percentage in an interest rate can make, suppose that you have a $185,000 30-year mortgage. A conventional home loan with the 2018 average rate of 4.795% might run you $970 per month, excluding mortgage-specific charges like taxes and private mortgage insurance.
But if you can qualify for a VA loan, the average 2018 mortgage rate of 4.552% might run you $940 a month. This $30 monthly difference could translate to a savings of $9,710 over the life of the loan.
Which way are rates trending in Tennessee?
Tennessee mortgage rates should average between mid to upper 3% in 2020.
Historically, mortgage rates in Tennessee have either matched or come in below the national average — at an average of 0.05% lower.
Housing authorities like Freddie Mac and Fannie Mae call for 30-year mortgages to average about 3.70%. Tennessee mortgage rates are likely to be around the same level or slightly under.
Compare mortgage rates throughout Tennessee
We crunched data from the Home Mortgage Disclosure Act to show you what you might pay on the average 30-year fixed-rate mortgage in several metropolitan areas in Tennessee. The estimated monthly costs exclude taxes or other charges specific to your mortgage.
| Metropolitan statistical area (MSA) | Average mortgage rate | Median loan amount | Estimated monthly cost |
|---|---|---|---|
| Chattanooga MSA (Hamilton, Marion and Sequatchie Counties) | 4.740% | $185,000 | $960 |
| Clarksville MSA (Montgomery and Stewart Counties) | 4.569% | $185,000 | $940 |
| Cleveland | 4.677% | $165,000 | $850 |
| Jackson | 4.700% | $135,000 | $700 |
| Johnson City | 4.927% | $155,000 | $830 |
| Kingsport MSA (Hawkins and Sullivan Counties) | 5.021% | $135,000 | $730 |
| Knoxville | 4.681% | $175,000 | $900 |
| Memphis MSA (Fayette, Shelby and Tipton Counties) | 4.741% | $185,000 | $960 |
| Morristown | 4.707% | $145,000 | $750 |
| Nashville-Davidson —Murfreesboro—Franklin | 4.712% | $245,000 | $1,270 |
Rates and costs based on data from ffiec.cfpb.gov.
How to get the best mortgage rate in Tennessee
Lenders ultimately decide the rates you receive. The best way to get the best rate is to:
- Research loan products. Compare lenders and loans you could qualify for to find the most competitive interest rates.
- Polish your credit. Pay off debt to lower your debt-to-income ratio and raise your credit score to qualify for a better rate.
- Compare closing costs. Closing costs are added to your mortgage, and could run you anywhere from 1.25% to 1.87% of the final purchase price in Tennessee.
Historical mortgage interest rates in Tennessee
Bottom line
Mortgage rates in Tennessee usually follow the national average and may even come in slightly under. But in the end, lenders set your interest rates. Compare loan types and lenders to make sure you’re getting the best interest rate possible.
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